WITH a little luck, you can spend only one yuan (US$0.15) and get a smartphone worth a few thousand yuan. This was once a real mode of consumption at an online lottery shopping mall based in Shenzhen, but such an operation is now regarded by authorities as an illegal practice equal to gambling or fraud.

Such online malls developed quickly on the Internet over the past few years since the first of its kind, Yiyuanyungou (www.1yyg. com), was launched in 2012.

To purchase products on the online shopping mall, consumers only had to spend one yuan to buy a share of a product. Once enough consumers had paid for the item, the system would make “a lucky draw” based on a certain computer calculation. For instance, an iPhone worth around 7,000 yuan (US$4,572) would require 7,000 one-yuan payments. Moreover, consumers are not limited to purchasing only one share, which means some consumers buy more than one, and sometimes even thousands of shares, for an item they want.

This unprecedented mode of business became controversial since there was no third-party supervision and the systems for drawing the lotteries could be highly suspicious and shady.

Recently, the country’s special inspection team on Internet finance risks issued a circular and defined online lottery shopping as an illicit conduct as it is either disguised gambling or a scam. Shortly after the circular rolled out, the Yiyuanyungou website announced it would suspend its operation for “rectification” and its head office was found empty with no staff.

According to a customer surnamed Wen, he had spent over 1.68 million yuan since he joined the website in October 2015. Although Wen had won several lotteries and received the items he wanted, he still lost more than 700,000 yuan.

The statement published by the company promised that all of the products for which the company had announced winners would be delivered to the winners on time and that customers would get refunds for shares they had bought for products that never underwent a lucky draw.

However, Wen and some other consumers said that although they could cash out their accounts, the products that they won in lucky draws had not been sent to them. “It’s been more than 20 days since I won a ring worth over 30,000 yuan, but I have not received it yet,” said Wen.

The customer service hotline and the company’s legal representative, Liang Zhijun, could not be reached. Along with several other consumers, Wen visited the company’s new office in Longhua, which had been relocated from Futian, only to find the office empty.

Police in Longhua have stepped in to investigate the case.

In fact, the Shenzhen company was the first in China to launch an online lottery shopping mall and had gained huge success in its first few years. Incomplete statistics showed that the website had over 10 million registered users and its daily sales volume exceeded 50 million yuan.

Other technology companies, including Xiaomi and NetEast, had adopted this mode and launched their own one-yuan shopping malls, but these two online malls ceased operation earlier this year.

(Zhang Qian)